Southwest Airlines' Executive Chairman Herb Kelleher Testifies at Senate Subcommittee Hearing Regarding the Wright Amendment
Southwest Airlines' (NYSE: LUV) Executive Chairman Herb Kelleher presented testimony today in favor of repealing the Wright Amendment during a hearing held by the United States Senate's Commerce, Science, and Transportation Committee's Subcommittee on Aviation. For a complete copy of Kelleher's full testimony and personal remarks, please visit: http://www.southwest.com/about_swa/press/051110_herb_testimony.html.
There is widespread community and organizational support for repeal of the Wright Amendment. More than 100 organizations, including the Greater Dallas Planning Council; the California Hotel and Lodging Association; the Air Travelers Association; the Amarillo (Texas) Chamber of Commerce; the City of Manchester, NH; Phil Bredesen, the Honorable Governor of Tennessee; the Nashville Convention and Visitors Bureau; the North Dallas Chamber of Commerce; the Nevada State Legislature; the National Taxpayers Union; the Raleigh-Durham International Airport Board; the Tampa International Airport; the Utah Air Travel Commission; the San Antonio Hispanic Chamber of Commerce; the Jackson (Mississippi) Metro Chamber of Commerce; and the Texas Public Policy Foundation, support removing the restrictions that shackle air service from Dallas Love Field.
Major newspapers and magazines across the country also have weighed in to support the repeal effort. From nationally known columnist George Will to the Los Angeles Times, editorial boards and journalists have weighed in on the importance of removing the Wright Amendment restrictions from Love Field so that free market enterprise may prevail.
HERB'S PERSONAL REMARKS:
Mr. Chairman, Distinguished Members of the Aviation Subcommittee:
Thank you for the opportunity to be with you.
I started working on the birth of Southwest Airlines 39 years ago, when only about 15 percent of American adults had ever flown on even a single commercial airline flight. Today, that percentage is around 85 percent. According to DOT, the "Southwest Effect" played a crucial role in increasing that 15 percent to 85 percent.
Because the CAB of the 1960s did not welcome price competition against its carriers, Southwest applied to fly as an intrastate airline. Southwest's proposal was very simple: charge much lower fares and provide a higher quality of air service than the incumbent CAB carriers.
From the reaction, you might have thought that we had proposed to unleash the Four Horsemen of the Apocalypse.
The incumbents:
1. Threatened to withdraw service from every city we proposed to serve
-- sound familiar?
2. Contended that low fares would not produce any additional passengers
-- sound familiar?
3. Hired every politically connected lawyer and lobbyist in the State of
Texas to oppose us -- sound familiar?; and
4. Took us on a four-year journey through the courts before we could fly
our first flight.
Southwest commenced operations in Texas in 1971. What happened? Not one airline withdrew service from any city we served. The Four Horsemen of the Apocalypse did not ride-but a huge multitude of additional passengers did.
In 1972, Southwest was sued to oust us from Dallas Love Field-a move that would have obliterated Southwest. This resulted in five more years of litigation, including two more trips to the U.S. Supreme Court and the Fifth Circuit Court of Appeals; and three proceedings before the U. S. District Court in Dallas. The Fifth Circuit Court of Appeals admonished:
"This is the eighth time in three years that a federal court has refused to support the eviction of Southwest Airlines from Love Field ... "
What next? In 1978, the Airline Deregulation Act became law. The CAB authorized Southwest to provide interstate air service from Love Field.
Then fate intervened -- the Honorable Jim Wright was the Majority Leader of the House of Representatives and represented DFW Airport. Without notice or hearing, he amended a House bill to ban all interstate air service from Love Field. The Senate refused to concur. A political donnybrook ensued. Senator Goldwater commented: "I think we're acting like a bunch of yo-yos, why can't people fly to the airport they want to?" Finally, I was informed that the Conference Committee had agreed on a compromise: nonstop interstate service could be provided out of Love Field to only the four states contiguous to Texas. Moreover, Southwest could not provide one-stop, through ticketing, nor market, passenger service beyond those states. I protested bitterly until reminded of a self-evident truth: that Jim Wright was the Majority Leader and I was not.
Thus, airline deregulation passed in 1978 and Love Field was reregulated in 1979, when I was 48 and Jimmy Carter was President of the United States. In the ensuing 26 years, DFW Airport has gotten so big that I'm surprised it wasn't implicated in a BALCO steroid scandal:
1. 18,500-acre DFW now has 166 gates compared to 32 at 1,300-acre Love
Field;
2. DFW is the world's third busiest airport.
3. The world's largest air carrier, American Airlines, with about 850
daily DFW flights (almost eight times more than Southwest at Love
Field), controls 84 percent of the passenger traffic at DFW and does
not exactly welcome interlopers with warm milk and graham crackers.
4. Due to its dominance, American Airlines charges high fares at DFW --
its generally available one-way coach fare to St. Louis and Kansas
City is $599.00; Southwest's generally available coach fare would be
$129.00; and
5. Since 1979, the DFW side of the Metroplex has grown enormously, while
the Love Field side has lagged.
According to a study by Campbell-Hill, which we commissioned, AND a separate study by DFW (which it attempted to suppress), failure to repeal the Wright Amendment will cause approximately 3.7 million passengers per year not to fly each year and cost the American economy $4.2 billion each and every year. What policy supports such a result?
I firmly believe that the Wright Amendment must be repealed-and repealed now! But, a number of well-intentioned public officials, organizations, and private citizens have solicited a compromise proposal to phase out the Amendment over a period of time. As I have stated numerous times publicly, if the political leadership comes forward to advance any reasonable compromise proposal, Southwest Airlines will participate in that process in good faith -- THAT is my public pledge to this committee.
Thank you for the opportunity to appear on behalf of competition; consumer choice; lower air fares for millions of Americans each year; and on behalf of the American public's Freedom to Fly.
Please visit http://www.commerce.senate.gov for additional information on the hearing or to access an archived copy of the webcast.
SOURCE Southwest Airlines
11/10/2005
CONTACT: Public Relations, 1-214-792-4847, or Customers, 1-800-I-FLY-SWA, or 1-800-435-9792, or en Espanol, 1-800-VAMONOS, or 1-800-826-6667, all of Southwest Airlines
2095 11/10/2005 15:37 EST http://www.prnewswire.com